Stock Market & Financial Investment News

Microsoft investors to benefit from shareholder activism, analyst saysShares of Microsoft (MSFT) are climbing after Nomura upgraded the stock. WHAT'S NEW: Microsoft investors can benefit from shareholder activism, Nomura analyst Rick Sherlund wrote today in a note to investors. Specifically, shareholders, led by ValueAct, are likely to press Microsoft to significantly increase its dividend and share repurchases, Sherlund believes. While ValueAct has a stake of less than 1% in Microsoft, it is seeking a seat on the company's board, and Microsoft could give in to its demands for larger shareholder returns, the analyst contended. Meanwhile, Microsoft's revenue from its corporate customers is stable and its cash flow is strong, added Sherlund, who upgraded the stock to Buy from Hold but kept a $38 price target on the shares. TODAY'S PRICE ACTION: In mid-morning trading, Microsoft rose 80c, or 2.5%, to $32.40.

Microsoft technical notes before earnings, levels to watchOn a long-term basis the stock has a potential double top pattern that would be confirmed on a breakdown below $40. In a shorter time frame the stock is range-bound between $45 at the low and $50 at the high. If the news is bearish, a breakdown below $45 would put the shares on a path for a test at that $40 support. A breakdown below $40 would see next support at $39.27 and then at $38.56. The downside target from the double top would be to the $30 area over time. If the news is a bullish surprise, a breakout above $50 would see next resistance at $53.13 and then at $55. Both are levels not seen since the year 2000.